January 18, 2006	Wednesday	Zilhaj 17, 1426

KARACHI, Jan 17: Except for an increase in jet fuel sales, the overall sales of petroleum products declined during July-December 2005, with a looming threat to low petrol consumption in future because of an increase in its prices and converting of vehicles to CNG.

According to industry people, petrol sales stood at 600,000 tons in the first six months of the current fiscal year as against 672,000 tons.

Rising Light Arab Crude prices in the world market pushed the domestic petrol price up to Rs56.29 from Rs33.78 per litre on January 1, 2004. From July 1, 2001 till today, the price of petrol has been increased 45 times as against decline by 23 times, while it remained unchanged for 40 times.

“The price hike is the main reason for making buyers hesitant,” an industry official said.

However, car sales surged by 23.5 per cent during July-December 2005 to 71,027 units from 57,010 units in July-December 2004. On an average, 12,000 cars add every month to country’s roads.

But this does not make a case for rising petrol consumption as over 50 per cent of the cars, being rolled out from assembly plants, are equipped with CNG kits and cylinders. Besides, two to five-year-old used cars are also being imported and consumers are now eager to have CNG kits in them. Besides, distributors of brand new cars are now offering company fitted CNG vehicles in higher engine capacity.

However, bikes are still dependent on petrol. Motorcycle sales (Honda, Yamaha, Suzuki, Sohrab, Tri-wheeler, Qingqi (tri-wheeler) reached 239,443 units in July-December 2005 as compared to 193,875 units in the same period of 2004.

Petrol sales in July-June 2004-05 rose by 5.48 per cent to 1.322 million tons as compared to 1.253 million tons in the corresponding period of 2003-04.

Buyers of petrol (especially car owners) have been shrinking at petrol pumps owing to rising prices and many of them have switched over to CNG. Only bike owners are seen in larger numbers at the pumps.

Sales of high speed diesel (HSD) declined to 3.7 million tons during the last six months from 3.95 million tons.

An executive at a refinery attributed the fall in diesel sales to depressed activity of transport movement after the Oct 8 earthquake to November coupled with unexpected rains in many parts. However, he said that diesel sales had picked up in December 2005.

An analyst said that since diesel prices had started climbing up, some people, having diesel cars and vehicles, had shifted towards CNG and LPG. From July 1, 2001 till today, diesel price has been increased 42 times as against decrease by 23 times, while it remained unchanged for 43 times.

Sales of light commercial vehicles (LCVs) rose to 14,549 units from 10,418 units in July-December 2004, while sales of trucks touched 1,916 units from 1,374 units. In contrast, sales of buses fell to 454 units from 684 units in July-December 2004.

Furnace oil sales declined to two million tons from 2.4 million tons in July-December 2004. The analyst said that rising dependence on hydel power generation because of availability of gas and water instead of thermal power generation was the main reason for a decline coupled with slow imports of furnace oil.

Sales of jet fuel increased to 350,000 tons from 270,000 tons owing to increasing flights towards earthquake relief operations combined with Hajj and international flights. However, Invest Capital and Securities has stated that jet fuel sales were recorded at 572,000 tons as compared to 453,000 tons. The industry official said that the brokerage house’s figures also included the increased consumption of jet fuel towards the rising export of goods to Afghanistan.

Kerosene is now considered as a dying product as LPG is slightly replacing it. Sales of kerosene stood at 112,000 tons in the last six months as compared to 120,000 tons. According to Invest Cap, light diesel oil (LDO) sales declined by 42 per cent to 61,000 tons from 106,000 tons. LDO is mainly used in slow-moving agriculture machineries.